Allowed

Praveen Kumar Saxena and Another v. State of U.P. Thru. Addl. Chief Secy. Dairy Development Lko. and 3 Others

Allahabad HC8 Feb 2024WRIA/919/2024

Case brief

AI extract

What is this about?

High Court Bench quashed an order rejecting interest on delayed gratuity. It directed respondents to pay 6% simple interest from retirement date, relying on Ram Khelawan and Supreme Court precedents, holding financial incapacity bars interest only if intentional delay is absent, but here laches admitted.

What did the court decide?

Impugned order quashed; Writ of Mandamus issued for 6% simple interest from day after retirement till actual payment.

Praveen Kumar Saxena and Another vs State… — Pension and Retirement Benefits | Allahabad HC (2024)

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Neutral Citation No. - 2024:AHC-LKO:19541

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Court No. - 17

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Case :- WRIT - A No. - 919 of 2024 Petitioner :- Praveen Kumar Saxena And Another Respondent :- State Of U.P. Thru. Addl. Chief Secy. Dairy Development Lko. And 3 Others Counsel for Petitioner :- Akshat Kumar,Sanjay Kumar Srivastava Counsel for Respondent :- C.S.C.,Shanker Lal

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Hon'ble Manish Mathur,J.

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Heard learned counsel for petitioners, learned State counsel appearing on behalf of opposite party nos.1 & 2 and Mr. S.D. Dwivedi, learned counsel for opposite parties no.3 & 4.

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Petition has been filed against the order dated 02.04.2022 passed by opposite party no.4 whereby grant of interest to petitioners on delayed payment of gratuity has been rejected on the ground of precarious financial condition of the Pradeshik Cooperative Diary Federation Limited, 29, Park Road, Lucknow through its Managing Director.

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Learned counsel for petitioner submits that petitioners' superannuated from service of opposite party no.3 on various dates as indicated in the impugned order itself but were constrained to file Writ Petition No. 25137 (SS) of 2020 for payment of gratuity and interest there on. The said petition was disposed of by means of order dated 17.12.2020 directing opposite parties to make payment of outstanding gratuity amount. Grant of interest to petitioners' were also required to be considered if found eligible. It is submitted that the impugned order has been passed in pursuance thereof and while gratuity has been paid to petitioners with certain delay but interest thereon has been refused on the ground precarious financial condition of the Union as well as the ground that there was no intentional delay in making the gratuity payment.

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Learned counsel submits that a similar issue has already been adjudicated by this Court vide judgment and order dated 25.10.2021 passed in Writ Petition No.22370 (SS) of 2021, Ram Khelawan Shukla vs. M.D. Pradeshik Cooperative Dairy Federation Lko & Anr. It is submitted that once the opposite parties have admitted delayed payment of gratuity, the petitioners are entitled to interest thereon in the light of aforesaid judgment.

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Learned counsel appearing for on behalf of opposite parties have disputed the submissions advanced by learned counsel for petitioners with the submissions that it has already been

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indicated in the impugned order that there was no intentional delay on part of opposite parties in payment of gratuity. It is further submitted that it was always the intention of opposite parties to make payment of gratuity to petitioners but the same could not be paid within the stipulated time period due to precarious financial condition of the Union. It is submitted that the payment of interest on alleged delayed payment of gratuity would harm the financial condition of the Union further.

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Considering the submissions advanced by learned counsel for petitioners and learned counsel for opposite parties, it is evident from the impugned order that opposite parties themselves admit that there were certain laches in payment of gratuity to petitioners. It is also admitted that the Payment of Gratuity Act, 1972 is applicable upon petitioners. The only reason for nonpayment of gratuity within time is attributed to the precarious financial condition of the Union.

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The said aspect of matter has already been considered by this Court in the case of Ram Khelawan (supra) wherein this Court following judgments of Hon'ble the Supreme Court in the case of D. S. Nakara vs. Union of India, AIR (1983) supreme Court, 130 and Kapila Hingorani vs. State of Bihar, (2003)6 SCC1 has rejected the contention of opposite parties particularly taking into account Section 7 of the Payment of Gratuity Act, 1972 and has thereafter granted simple interest @ 6% per annum to the petitioners of said writ petition.

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In the considered opinion of this Court, there is no occasion to take a divergent view from the judgment and order passed by this Court in the case of Ram Khelawan (supra) particularly in view of the dictum of Hon'ble the Supreme Court in the case of Kapila Hingorani (supra).

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As such, the order impugned dated 02.04.2022 is quashed to the extent of refusal for payment of interest on delayed in payment of gratuity by issuance of a writ in the nature of certiorari. A further writ in the nature of Mandamus is issued directing the opposite parties no.3 and 4 to pay simple interest @ 6% per annum to the petitioners with effect from 30 days next after the date of retirement till date of actual payment. Compliance of this order shall be made within a period of three months from the date a copy of this order is produced before the concerned authority.

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As a consequence, the writ petition stands allowed at the admission stage itself.

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Order Date :- 4.3.2024/Satish

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Digitally signed by :- SATISH KUMAR BHARATI High Court of Judicature at Allahabad, Lucknow Bench

Praveen Kumar Saxena and Another v. State of U.P. Thru. Addl. Chief Secy. Dairy Development Lko. and 3 Others

Case brief

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Praveen Kumar Saxena and Another v. State of U.P. Thru. Addl. Chief Secy. Dairy Development Lko. and 3 Others

Case brief

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